Familiarising yourself with these terms will ensure everyone involved in your paid advertising efforts is on the same page, avoiding confusion and optimising your campaigns for success. Here are the terms to know before running paid ads:
Search Engine Marketing (SEM):
A marketing strategy that includes search engine optimisation, content marketing, and paid ads.
Social Media Marketing (SMM):
A marketing strategy limited to social media channels, including organic and paid traffic.
Conversion:
The desired action that you want someone to take on your website or funnel, typically involving a time or money commitment on behalf of the customer.
Conversion Rate:
The percentage of prospects landing on your page or taking you up on your offer.
Cost Per Click (CPC):
The amount charged for each click on your ad campaign.
Cost Per Thousand (CPM):
The cost charged for every 1,000 impressions, where an impression is defined as someone landing on the page where your ad is placed.
Click Through Rate (CTR):
The percentage of potential customers who saw an ad and clicked on it, indicating the quality of your ad copy and media.
Cost Per Acquisition (CPA):
The expense incurred to acquire a new customer.
Return On Ad Spend (ROAS):
The amount of revenue earned per dollar of ad spend.
Return On Investment (ROI):
The return calculated after accounting for the entire cost of the ad campaign, including agency fees, copywriting, graphic design, video production, call tracking, etc.
Lifetime Value (LTV):
The long-term value of a customer.
Urchin Tracking Module (UTM):
A piece of code added to the end of a URL that tracks ad clicks and is pushed to the search engine.
